Sellers Do you know what is Absorption Rate?
June 1st, 2007 by asandsAbsorption Rate is an important Real Estate indicator…
All homes are not equal, nor is how they are priced equally well. In a tough seller’s market it is important to understand the rate at which homes are selling and look at it from various angles. For instance, we look at it at the county level, community breakdowns, by number of bedrooms, price and with/out pools.
It helps us in understanding what is selling at at what rate. When we understand what is happening we can take a look at the comparable listings in determining a listing price.
Absorption Rate helps us understand what is going on in the Real Estate Market. The Orlando Avenue Top Team looks at these numbers monthly.
ABSORPTION RATE is the mathematical representation of the relationship between supply and demand. To calculate Absorption Rate, if there is no sales in the prior month, there is no rate to look at:
| # of Active/Pending Listings | 1,000.00 |
| # of Sold Last Month | 100.00 |
| # Sold x 12 (months) | 1,200.00 |
| Divide by 52 Weeks (units per week) | 23.08 |
| Absorption Rate (Active Listings divided by units per week) | 43.33 |
If you have questions regarding Absorption Rate, or what is going on in the market in your area, please call our team today at (407) 288-0017.